US trucking conditions soften, but summer rebound expected

Categories

Tags

BLOOMINGTON, Ind. — Trucking conditions in the US have softened, but are poised to rebound, according to the latest Trucking Conditions Index compiled by FTR.

The 7.3 reading marks softness resulting from the end of large drops in fuel costs and a modest lessening of demand for trucking services, FTR reports. However, it adds the index should rebound this summer as economic growth improves, truck demand stabilizes and capacity tightens.

“Conditions for truckers and fleets remains quite positive despite the recent dip in the index,” said Jonathan Starks, director of transportation analysis, FTR.

“This dip followed a very strong increase in the TCI over the last half of 2014 as solid volumes, good rate gains, and falling diesel prices helped propel the December index to its first double-digit reading since early 2010. The recent data on the economy has been mixed with Q1 GDP coming in substantially weaker but sales and employment picking back up to start Q2. This recovery has been unusual in that Q1 GDP has generally been much weaker than the growth seen the rest of the year. This gives us optimism that the truck markets will not be significantly slowed, although it is likely that manufacturing output will be less strong in 2015.”

“If consumers save that cash, it will likely mean another year of slow and steady economic growth; however, if production doesn’t slow to follow suit, then we will get an inventory glut that will have to be quickly worked down. If they start spending, it could help fuel another surge in economic growth like we saw last year.”

Many shippers are saying the rates are too high now. At the same time in Canada the building boom in the G.T.A. means that other jobs are paying better. Many young people under(25) will not work under present working conditions.